People love to tell stories about crypto. Overnight millionaires. Wild price swings. Friends who “got in early” and cashed out. It sounds exciting — almost like you’re missing the boat if you’re not in.
But here’s the truth I share with clients: investing in crypto is more like gambling than investing.
And just like with gambling, it’s okay to set aside a small budget if you want the thrill. What you shouldn’t do is build your entire financial future on a slot machine.
Gambling vs. Investing
When you buy a stock, bond, or index fund, you’re buying into something that produces value. Companies make profits. Bonds pay interest. Real estate generates rent. That steady stream of earnings is what pushes the value of investments higher over time.
Crypto doesn’t work that way. It doesn’t produce profits, pay dividends, or have assets tied to it. The price goes up only if someone else is willing to pay more later. That’s speculation, not investment.
That’s why I say: treat crypto like gambling. If you’ve got wealth and want to play around with a tiny amount for fun, fine. But don’t mistake it for a wealth-building plan.
Volatility: A Roller Coaster Ride You Can’t Control
Let’s look at the numbers. The S&P 500 — which represents hundreds of America’s strongest companies — has grown steadily for decades. Yes, there are ups and downs, but over the long haul it trends upward.
Crypto? It swings wildly. One year you’re up 200%. The next year you could be down 70%. The annual volatility of Bitcoin has historically been several times higher than the S&P 500. That’s not a ride you want your retirement savings strapped into.
And here’s the kicker: most people don’t ride it out. They get in when prices are high (because of FOMO) and panic sell when it crashes. That’s not wealth building — that’s stress building.
The Role of Greed
Why do people take these kinds of risks? One word: greed.
Crypto dangles the promise of quick riches, and for many, that’s hard to resist. But greed is what gets people into messes — chasing shortcuts instead of trusting the tried-and-true path of saving steadily, investing in broad markets, and letting compounding do its magic.
Scammers know this too. That’s why crypto has become one of the leading ways people are defrauded worldwide. The FBI reported over $16 billion in internet crime losses in 2023, much of it tied to crypto scams. “Pig butchering” scams, fake investment platforms, hacked exchanges — billions lost, often unrecoverable.
Why Crypto Scams Are So Common
Unlike your bank account, crypto transactions don’t come with fraud protection. Once it’s gone, it’s gone. Add in the lack of clear regulation and the ease of moving funds across borders, and you have a playground for criminals.
Chainalysis found that crypto scams and frauds raked in billions in 2024 alone. And that’s just what was detected. Imagine how much isn’t even reported.
When you mix people’s greed for fast money with a system that’s easy to exploit, the result is predictable: more scams, more heartbreak.
What Real Wealth Building Looks Like
Here’s the part people often overlook: wealth doesn’t come from shortcuts.
Wealth comes from consistency. Saving every month. Investing in things with real economic value. Letting time and compounding work quietly in your favor.
- Invest in the S&P 500 or total-market index funds. You’re buying hundreds of companies that make real products and real profits.
- Use retirement accounts like a 401(k) or IRA for tax advantages.
- Balance with bonds or cash depending on your stage of life.
- Keep an emergency fund so you’re not forced to sell at a bad time.
It’s not flashy, but it’s proven. It works. And it doesn’t leave you awake at night wondering if your retirement evaporated because of a tweet or a hack.
Bottom Line
Crypto is gambling. Fun if you’ve got extra money to risk, dangerous if you mistake it for a plan.
Don’t let greed trick you into chasing shortcuts. Instead, build wealth the same way millions of financially secure families have done: steady investing, patience, and trust in time-tested strategies.
Remember, slow and steady beats lucky and risky every single time.
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